It’s time to overcome the fear of being the idiot who did something faddish and look for a more ethical way to save.
by Zoe Williams
The Guardian, Wed 4 Jul 2012
Nobody needs a lecture on what the banks have done wrong, except possibly the self-justifying bankers themselves (and here’s a good one). The lecture we need is the one where we move our money. The movement has a name and everything: it’s called Move Your Money. What you do, right, is take your money out of a bank whose behaviour you disapprove of, and move it somewhere else – an ethical bank, a building society, a credit union.
It’s not a radical idea, and it’s gained some pace recently as the big banks vie for the chance to see what alienates customers the most, between not being able to run a website, not being able see a market without wanting to rig it, not being able to take responsibility for anything and simply not giving a toss. By Tuesday this week, Nationwide had reported an 85% week-on-week rise in its online applications for new accounts. The Co-op had a 25% increase. “It is the people who have the power to change banks, not the politicians and certainly not the regulators,” said Bruce Davis, who co-founded Zopa. “It’s more than a consumer choice, it is a democratic one. It is about moving the power of money away from those who take it for granted.”
I haven’t done it, for these reasons, in ascending order of irrationality. First, I have a sense of loyalty to my bank. I chose it because it was where my parents banked. I remember thinking how much more trustworthy a cheque from NatWest looked than one from Lloyds. I remember reading the factette about people being more likely to change their spouse than their bank, and thinking this put me in a nice club, loyal but not uncritical. It would be impossible for a company, however bad its ethos, to infect its staff with those values, so that when you’ve banked somewhere for 20 years, you’re going to have had some good experiences.
There’s some cognitive dissonance, where your psyche beefs up those good experiences to make sense of a loyalty that is otherwise craven. You choose your bank at a seminal point in your life, when you’re choosing everything: the music that means anything to you; the films you can quote; your favourite smells; if you’re a man, your haircut. It’s hard to walk away from that, but not that hard. A simple, “it’s not even NatWest anymore, it’s RBS, we all own it but we suck at running it”, should do.
I think the more powerful driver, though, is a fear of being made a fool. John Lanchester described how most people’s attitude to finance, of any sort, is to be confused in anticipation, before the explanation has even begun. He described it as being pre-baffled, and I guess you identify as a pre-baffle-ite (if you like …) at roughly the same time as you choose your bank. If you don’t believe your judgment to be underpinned by comprehension, the next best thing is to make it the same judgment as everybody else. Realistically, how can you all be wrong?
Even now, when we’ve seen how easy it is to be all wrong at the same time – indeed, how much likelier it is that, travelling with a herd, you will end up wrong, this fear remains.
It reaches beyond the current account into investment generally – I don’t agree with tax breaks on Isas. I think if we’re going to approach saving as a social good, which we reward collectively, then it has to do more than simply reward rich people for looking after themselves. The tax breaks have to attach to social investment projects (paradoxically, at the moment, these tax breaks actively exclude social investment). I don’t believe in tax breaks on private pensions, for the same reason (they mainly benefit higher rate taxpayers), but also because a lot of the money is skimmed off by fees and charges of pension companies (it pleases me that this point comes not from Left Foot Forward but from Conservative Home).
And yet, when I think of walking away from a pension, I feel a peculiar mix of guilt and humiliation. I picture myself at 80, the idiot who did something faddish instead of what people had always done and can never retire.
This extends beyond the thick individual, into the thick organisation. Ben Simmes is a director at Oikocredit, one of the most successful microcredit organisations in the world. It was set up in 1975 to give an alternative investment vehicle for churches, a way for them to use their money in pursuit of the values they represented, for which people gave them money in the first place.
The churches wouldn’t touch it. By the turn of this century, well before the financial crash, it was clear that microfinance delivered returns to match those of mainstream investment. The churches still wouldn’t touch it. Now, as the bank demonstrates not just positive social impact but better returns and greater resilience than regular banks, have they changed their minds? “Maybe they invest 5% of their portfolio,” Simmes shrugs. Values evaporate around money, not just for the people who get it but also for the people who don’t get it. We fear that values will be indistinguishable from gullibility or ignorance.
Luckily, we’re at a point where, short of keeping it at home, there is almost nowhere you could move your money that would look more naive than not moving it at all. Just move it. I’m going to move it.